Josh Wilson (Fremantle, Australian Labor Party) Share this | Hansard source

I'm glad to speak to this motion on investor-state dispute settlement. I will help the member for Page with some key facts and even a little bit of relevant history. I'm actually going to talk about ISDS. First let me say very clearly that Labor has always supported fair, free trade and investment. The Albanese government has not wasted time in ratifying two agreements within the first nine months—namely, the Australia-UK Free Trade Agreement and the Australia-India Economic Cooperation and Trade Agreement. We are also now in a position to ratify the Joint Initiative on Services Domestic Regulation that applies common high-standard principles for managing trade and service export between some 70 countries. But we don't support the use of investor-state dispute clauses in trade and investment agreements, because they aren't necessary for enabling secure and fair treatment of Australian investment overseas and they do put at risk Australia's capacity to regulate in the best interests of our community.

For anyone at home who has never heard the term 'ISDS', these clauses allow companies to resolve a dispute with a foreign government using an international tribunal system rather than relying on the judicial review processes that exist in the given country or on country-to-country resolution mechanisms within trade agreements. To some extent they're regarded as a shortcut for companies to challenge obstacles to their operations or to overcome unfair treatment, particularly if that includes the expropriation of assets.

Over a period of time these tribunals have been found to have severe shortcomings in terms of their integrity. There have been numerous cases of large multinationals using ISDS to attack sensible public policy regulations in areas like environmental protection and workers' rights, simply because those regulations affected company profits. For example, ISDS cases have included the French Veolia company's action against the Egyptian government, seeking compensation for a rise in the minimum wage. In August last year the British oil company Rockhopper won 210 million pounds through an ISDS action against the Italian government because in 2015 the Italian government had the temerity to ban new oil and gas projects within 12 nautical miles of its coasts. Even when those ridiculous ISDS cases fail, they still impose significant costs on the countries that defend them and they have a chilling effect on countries contemplating the kind of regulation that has been challenged.

We have our own experience in Australia of being on the end of these dangerous dodgy legal actions. It wasn't that long ago that tobacco company Philip Morris used an ISDS clause in seeking to overthrow Australia's very effective plain-packaging reforms. That action ran for several years, it cost the Australian taxpayer tens of millions of dollars and it delayed other countries, including New Zealand, implementing their own plain-packaging reforms. We didn't win that case. Philip Morris only lost on a jurisdictional issue, so we don't know whether they would have succeeded if they had been able to use a more relevant agreement as the basis of their claim. Perhaps the shadow minister for trade will have a closer look at that, rather than claiming we won it, which is simply not true.

More recently it was argued that the Western Australian legislation used to ensure Clive Palmer couldn't sue the WA government for billions of dollars might be capable of being challenged through an ISDS mechanism and just last year there was interest shown by energy companies in Japan and Korea about using ISDS to challenge our regulation of domestic energy supplies and prices. That is what is at stake with ISDS clauses. They allow big foreign companies to challenge and obstruct good public policy and they detract from a sensible focus on supporting robust legal systems in developing countries and from strengthening country-to-country dispute resolution mechanisms.

We've already seen how ISDS clauses can allow foreign companies to interfere with Australia's sovereign capacity to regulate in our national interest. That is what those opposite would like to enable. They would like to enable foreign multinationals to interfere with Australian environmental and workplace laws and with Australian management of our own energy resources.

We're currently in negotiations on the settlement of an historic trade agreement with the European Union. Does the shadow minister for trade argue that we should be pursuing the inclusion of an ISDS clause in those negotiations? The EU will not accept such a clause and, indeed, is active in seeking to reform and move away from existing ISDS arrangements. That's because ISDS clauses are unnecessary and they're dangerous.

This Labor government will continue to pursue, settle and support fair and free trade agreements. But I can tell you we will not support a system that puts Australian sovereignty at risk—a system that subjects Australia to enormously expensive legal action in dodgy tribunals with no appeal processes, a system that could stop us from regulating to protect health services, safe workplaces and our environment. If the member for Page, the shadow minister for trade, thinks that that is a sensible and winning proposition to take to the Australian people, well, good luck to him.

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